McCrory budget sets terms for debate

Gov. Pat McCrory's proposed biennial budget, released last week, disappoints on many levels, but it lays out a reasonable basis for beginning the debate on spending priorities in a still recovering economy when fiscal restraint in state spending must continue.

McCrory chose not to propose any major tax reform initiatives with the exception of repealing the estate tax, which will lose the state $52 million in revenue. Otherwise, he assumes the current tax system and revenue collections will remain the same.

On the bright side, the governor proposed a spending increase of $52.4 million to add 5,000 slots for at-risk children to the state's pre-kindergarten program. McCrory's budget would increase the number of teacher assistants in kindergarten and first-grade, though it eliminates them for second and third grades. His budget also partially restores textbook spending by $58.3 million.

Few would argue with the short- and long-term benefit of giving at-risk children the best possible chance of succeeding in school. Such success dramatically increases the chances that they will become contributing members of society rather than draining its resources.

Despite these efforts, the governor's budget falls far short of addressing the desperate need to improve North Carolina's standing with regard to education. He proposes a 1 percent pay increase for teachers and other state employees, but recent reports have ranked North Carolina 46th in teacher pay.

"We are losing quality teachers every day because neighbor states offer better pay," state Superintendent June Atkinson told the Raleigh News and Observer.

Public schools, community colleges and the University of North Carolina system would all get less money overall than they did in the current year under McCrory's budget. The state is already 48th in the country in per pupil funding, according to recent reports. What does that portend for the state's future workforce? And what industry that needs a highly skilled workforce would look at such numbers and see North Carolina as a promising place to locate?

The governor sets aside $150 million to repair and renovate state buildings, a wise investment to protect the state's assets, and provides $10 million for compensation to victims of the state eugenics program, funding the Republican-dominated Senate refused to support last year.

But it's hard to see the governor's decision to reduce or eliminate funding to a number of programs that have helped make North Carolina one of the most progressive states in the southeast as anything but a penny wise and pound foolish.

McCrory's budget would fund the Clean Water Management Trust Fund at only $6.8 million. Over the past 16 years, the CWMTF has invested more than $880 million in projects around the state, and leveraged more than $1 billion in private, local and federal funds to support those projects. The non-partisan, non-regulatory program's carrot-instead-of-a-stick approach to cleaning up and protecting the state's water has been hugely successful and deserves much of the credit attracting new industry like the craft breweries that have chosen to locate in Western North Carolina.

The governor also chooses to cut the N.C. Biotechnology Center's budget to $7.2 million, $10 million less than it received in the current year. That means live sciences companies will likely look to other states where funding and incentives are more readily available, Biotech Center CEO Norris Tolson said in a statement.

McCrory's budget also diverted all the tobacco settlement funds that the Golden LEAF Foundation would normally receive. Golden LEAF grants have helped create or retain almost 48,000 jobs and resulted in private investment of $2.9 million.

Eliminating an estate tax that affects a handful of multi-million dollar estates while virtually eliminating programs that have a record of creating a competitive workforce and high-paying jobs is madness, not only because it results in tragic loss of human potential, but because it impoverishes the state as a whole. Fewer high paying jobs means fewer tax dollars. That results in less investment in education and health care and clean water and gives us a less attractive work force and environment for industries looking for a new place to locate.

McCrory's fiscal discipline is to be cheered, but his priorities need adjusting.

Programs like the ones Gov. McCrory's proposed budget targets have helped to make North Carolina one of the most forward-looking and successful states in the southeast. It would be a sad legacy to see that progress reversed under the first Republican governor in two decades and the first Republican House and Senate in more than a century.